Copyright Review Commission Report - ICT Law and Regulation ...

the final rate or rates to be applied. If the amount for the arrears differed from that computed in terms of theTribunal's determination, there would be either a partial refund by RiSA or an extra payment by the SABC.Despite the fact that the SABC's representatives confirmed that the two agreements were not linked, it appearsthat the SABC's refusal to implement the undertaking it gave to the CRC in respect of the arrears is based onRiSA's refusal to accept the SABC's proposals based on future use and its insistence on extra terms, which theSABC does not find acceptable.3.2.23. The CRC hopes it is not too late for the parties to resume negotiations on the issues outstanding and resolvethem satisfactorily.3.3 LESSONS TO BE LEARNED FROM EVENTS SINCE THE ENACTMENT OFNEEDLETIME LEGISLATION3.3.1. The fact that nine years after the enactment of the needletime legislation, not a cent has been paid to thosewhose sound recordings have been broadcast shows that the provisions in the Copyright Act and Performers'Protection Act dealing therewith, as well as the Collecting Societies Regulations, are defective and requireamendment.3.3.2. Section 9A (1) (a) of the Copyright Act and Sub-sections (1) (b) and (3) of Section 5 of the Performers' ProtectionAct put in place a statutory licence for those who intend to perform the acts referred to in Section 9 (c), (d) and(e) of the Copyright Act without the permission of the rights holders. Unlike the legal rules relating to rightsenjoyed, for example, by composers, which from a jurisprudential point of view can be described as ‘propertyrules’, the rules relating to the use of rights (Section 9 (c)-(e)) subject to the payment of royalties in terms ofSection 9(A(1)(a)) of the Act can be described as ‘liability rules’. ‘Property rules’ describe how an owner ofproperty may control the use of his or her property by a stranger, subject to the power of the Copyright Tribunal,under Section 33 (3) and (5) of the Copyright Act, to overrule a refusal by an owner to give permission for the useof the property or the grant of permission on unreasonable terms (in which case the permission is granted by theTribunal and must exist before the stranger uses the property). ‘Liability rules’ permit a stranger to use the rightswithout the owner's permission, but subject to the incurrence on the user's part of liability to pay the owner of theright a royalty, to be quantified by agreement with the owner of the right or determined by the Copyright Tribunalor an arbitrator. The distinction between property and liability rules was expounded by Guido Calabresi and ADouglas Melamed in “Property Rules, Liability Rules and Inalienability, One View of the Cathedral”, 85 HarvardLaw Review 1089 (1972). The statutory licence in respect of needletime does not adequately protect the positionof the holders of the rights to which the licence relates, and this lack of protection led directly to the unsatisfactorysituation outlined above. (In this respect, it differs markedly from the corresponding provisions in the BritishCopyright, Designs and Patents Act, 1988, as amended, on which many of the recommendations set out beloware based.)3.3.3. The Act simply requires the statutory licensee (the user) to pay a royalty when agreed or determined, withoutspecifying that the agreement or determination is to exist before the use, giving rise to the liability to pay theroyalty. If there is no agreement as to the royalty and no reference to arbitration, a reference to the CopyrightTribunal could take a long time before being finalised. The Tribunal's decision may be taken on appeal to a fullBench in the High Court and even to the Supreme Court of Appeal if the necessary leaves to appeal are granted,all of which could lead to further delays. This puts the performer in an even worse position. The performer does- 24 -